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Litigants in person and costs recovery

The ever-increasing number of litigants in person (LiPs) in the civil courts means that solicitors can find themselves negotiating with a wide range of people, from McKenzie Friends to claims consultants. We look at the status of these representatives and the potential costs consequences should a costs order be made in the LiP’s favour. LiPs are a problem. Simon Hughes MP, the Minister for Justice and Civil Liberties, admitted as much at the Liberal Democratic party conference and said that there would be an announcement soon about how to support LiPs. Mediation is likely to be pushed even more strongly than it is at present.

Recent developments

Last September we reviewed the Judicial Working Group’s plans to help LiPs in the context of court administration. The proposals included a review of the rules applying to McKenzie Friends and other lay assistants.

In April this year the Legal Services Consumer Panel (LSCP) published a report about what it described as the emerging market of fee-charging McKenzie Friends. A McKenzie Friend supports LiPs by providing moral support, taking notes, helping with case papers and giving advice. They do not have the right to conduct litigation or to act as an advocate but the court may allow them rights of audience where it is in the interests of justice to do so.

In September the Legal Services Board responded to the LSCP’s report, saying that they were cautious about formally accepting fee-charging McKenzie Friends as a legitimate feature of the legal services market.

The evolving legal services market

An LiP could be paying money for the assistance of a fee-charging McKenzie friend, a claims consultant or a barrister acting under the direct access scheme. They could also be represented by a pro bono barrister or solicitor at some stage in the proceedings.

Although we think of a litigant in person as being a litigant without legal representation, the term also includes a party represented by a barrister. An LiP is therefore a litigant who during any stage of proceedings in court is not represented by a solicitor. Unless the LiP is assisted by a practising barrister, they may well be paying someone for advice who has had no or little legal training, has no professional indemnity insurance and is not regulated in any way.

Recovery of costs

The position regarding the recovery of costs against the other party will vary according to the type of assistance or representation and this can be financially significant if the LiP has a costs order in their favour. We look below at the various options.

Litigant in person

An LiP can recover costs in accordance with CPR 46.5. This includes their own time, at the current hourly rate of £18 where they cannot prove a financial loss, and disbursements they have made which would have been recoverable if made on their behalf by a legal representative. With the exception of disbursements, they cannot recover more than two-thirds of the amount to which a solicitor would have been entitled. An LiP can also recover in respect of expert assistance in connection with assessing the claim for costs and “payments reasonably made by him for legal services”. These must be services provided by or under the supervision of a lawyer (United Building & Plumbing Contractors v Kajla).

Fee charging McKenzie Friend

Unless the courts decide to take a different approach to this question, an LiP cannot recover the fees he has paid a McKenzie Friend since the latter’s services are not provided by or under the supervision of a lawyer.

Claims consultant

A claims consultant could be a lay person, a non-legal professional such as an accountant or a non-practising lawyer, that is, a barrister or solicitor without a practising certificate at the relevant time (see the discussion in Walter Lilly & Company Ltd v Mackay about the importance of the right to practise in the context of giving privileged legal advice). As such, they are unlikely to be authorised to conduct litigation (even if they are licensed to instruct counsel directly - see the Legal Services Act 2007 and Agassi v Robinson) and their costs of doing so or providing “legal” advice are not recoverable as costs. Their costs may, however, be recoverable in arbitration (Piper Double Glazing Ltd v DC Contracts (1992) Ltd).

Public (direct) access barrister

​A member of the public can instruct a barrister to represent them in court proceedings without the intermediary of a solicitor. The barrister is not allowed to conduct the litigation since they are not licensed by the Bar Council to do so under the Legal Services Act 2007. This means they cannot do acts such as issuing proceedings or applications, acknowledging service of proceedings, giving their address as the address for service, filing documents at court or serving documents on another party and issuing notices of appeal. The courts have defined the “conduct of litigation” narrowly in this context. In O'Connor v Bar Standards Board conducting correspondence with the other side and signing statements of truth were held not to be the “conduct of litigation” and therefore were acts a barrister could perform. Where a litigant instructs a barrister to represent them via the public access scheme, it appears that the litigant will still be defined as an LiP (see Bar Council’s Guide to recovery of costs in non-solicitor cases). An LiP will be entitled to recover the barrister's fees as disbursements, presumably excluding any services defined as the conduct of litigation.

Pro bono barrister

The LiP may be fortunate enough to be represented by a lawyer who does not charge a fee. As discussed above, they will only be classed as an LiP and therefore able also to recover costs for their own time if that lawyer is a barrister. The Legal Services Act 2007 has made it possible to recover costs from the losing party in these circumstances. The costs cover any period when free representation was provided and the amount is based on what a paying client would recover. The costs must be paid to a charity, the Access to Justice Foundation.

Costs budgets

CPR 3.13 exempts LiPs from the requirement to exchange and file costs budgets but Paragraph 7.8 of Practice Direction 3E entitles them to receive a copy of the budget of any other party.

One consequence of this appears to be that a party directly instructing a barrister will not have to file a costs budget because they would still be classified as an LiP. If that is correct, there is no requirement in the CPR for the party to provide any information about their estimated costs. It must be reasonable in that situation to request (and insist on being given) details of counsel's fees to date and estimated for the rest of the case, and details of other disbursements such as experts' fees. All parties are required to provide an estimate of the latter in any event under CPR 35.4.

Conclusion

It is important for a solicitor acting for a party in litigation against an LiP to establish the status of any person purporting to represent or assist the LiP, and to do so earlier rather than later in the case. As we have seen, this status affects the costs that may be recovered from the other party should the LiP obtain a costs order in their favour. It also affects costs budgeting requirements. And as for the rise of the fee-charging McKenzie Friend, this trend will only continue given the number of litigants looking for affordable help and the growing ranks of lawyers without firms, chambers or in-house jobs looking for new ways to make a living out of the law.

Compare jurisdictions:Litigation: Enforcement of Foreign Judgments

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